Kerry readies budget speech

Says plan will halve deficit in 4 years

WilliamL. Watts

WASHINGTON (CBS.MW) -- Democratic presidential candidate John Kerry says he has a plan to halve the deficit in four years and keep spending under control.

Kerry plans to offer detailed budget proposals at Georgetown University Wednesday in what his campaign is calling the second of three major economic speeches.

The speech will play a large role in Massachusetts senator's attempt to claim the mantle of fiscal responsibility while portraying a return to record deficits, at least in dollar terms, as evidence President Bush has mishandled economic policy and betrayed his claim to being a fiscal conservative.

"If you are a truthful person, there is nothing conservative about running up deficits as far as the eye can see," Kerry told a campaign rally in Cincinnati on Tuesday.

Wednesday's speech comes as President Bush's re-election campaign has spent millions on television ads in recent weeks blasting Kerry as a liberal spendthrift who would be forced to raise taxes to pay for new government programs.

"I think he needs to make clear in this speech that he's not another tax-and-spend liberal from Massachusetts," said Matt Streb, a political science professor at Loyola Marymount University in Los Angeles.

Kerry's allies say the candidate plans to make clear how he'll pay for his programs and control the deficit. That includes scaling back some measures, such as universal pre-school and service programs, Sen. John Corzine, D-N.J., told reporters Monday in a conference call organized by the Kerry campaign.

Kerry will also strictly adhere to expired "pay as you go," rules that capped discretionary spending and required increases in entitlement spending to be offset by spending cuts or tax rises elsewhere, Corzine said.

Kerry has vowed to restrict tax hikes to Americans earning more than $200,000 a year. They would see their share of the Bush tax cuts rolled back while relief for middle- and lower-income Americans would be preserved, the candidate has said.

The Bush campaign, meanwhile, has portrayed Kerry as a habitual tax-hiker that would be forced to boost taxes in order to pay for his proposed programs. In a memo released Tuesday, the Bush-Cheney campaign said it had upped its earlier estimate of Kerry's campaign proposals to $977 billion over five years and $1.9 trillion over the next decade.

Bush campaign ads have charged that Kerry would raise taxes by more than $900 billion over the next decade. The candidate hasn't proposed such an increase, but Bush campaign officials say the figure is based on the spending increase required by Kerry's healthcare program.

Streb said the Bush ads appear to have deflated Kerry somewhat in the polls. The challenger was leading Bush as he wrapped up a string of primary victories this spring, but surveys now show him in a dead heat or trailing the president.

Democrats and Republicans have been hammering each other since the beginning of the Bush administration over the transition from surplus to deficit.

Republican pollster David Winston said the deficit issue is unlikely to outrank jobs, terrorism, education and healthcare as a key campaign issue this fall.

Meanwhile, the Bush campaign got some encouraging news last week regarding the jobs picture, which has been the president's biggest domestic worry.

The Labor Department on Friday reported that payrolls grew by 308,000 in March, the strongest jump in nearly four years.

While it's unlikely future months will match that stronger-than-expected jump, a string of monthly job gains averaging around 100,000 or more would go a long way toward dispelling Bush's economic woes, Winston said.

If that occurs, "there will be a point in time where if that's sustained, people will say, 'OK, we're back on track in terms of creating jobs," he said.

Democrats note that the economy still has posted a net loss of around 2 million jobs over the course of Bush's term, a figure that likely won't be completely erased by November even amid robust jobs growth.

Streb said the jobs picture could be the wild card in the November results.

"If voters think that national security is the most important issue, I think Bush wins. If voters think the economy is the most important issue, I think Kerry wins," Streb said. "But if President Bush keeps getting the jobs number that he got last month, then that could change."

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